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Average Seasonal Price  03/20/19 3:57:45 PM Contracts 
Average Seasonal Price Contract

The Average Seasonal Price Contract (ASP) is a cash grain contract that allows producers to price a specific amount of bushels over a specific amount of time.  The bushels and the time frame are set at time of contract. 
Bushels on the ASP Contract are priced over a pre-determined time frame and are priced in equal amounts on a weekly basis over the time frame.  Pricing will be done each Thursday at 2pm at the close of the CBOT market for that day. HTA contracts will use the closing futures price and cash contracts will use the closing cash price for the day at the location specified. 
There is a one time opportunity to price out any unpriced bushels on any date during the day market session at the cash or futures price at that time. 

Advantages: ASP contract provides discipline to marketing your crop through pricing an equal quantity of contracted grain over a specific period. Since the pricing mechanism is automatic, this also takes the emotion out of the pricing decision and you can be assured that your contracted bushels will get priced. Also, sharp rallies can be can taken advantage of by utilizing a one time price out option on all remaining unpriced bushels on the contract by notifiying a Fremar originator on any date during the market day session. No HTA fees, No Service Fees, 1000 bushel minimum to sign-up.

Disadvantages: Historical price patterns are not a guarantee of future price movement. The price is averaged or indexed not delayed or accelerated based upon market action during the pricing period.

Example 1: Producer contracts 5000 bushels of corn for harvest delivery to Fremar.  The pricing period is Jan 5 - Sept 14.  There are 37 pricing dates (Thursdays) during this period.  5000 bushels divided by 37 pricing dates would price 135 bushels per Thursday.  At the end of this pricing period, the average cash or futures price will be determined.

Example 2:  If producer is halfway through pricing period and market rallies to level where they would like to price the unpriced portion of the bushels, they can price it at current market on that date.  The unpriced bushels will be averaged with the bushels that have been priced to date and will then generate one contract with the average price over the pre-determined amount of bushels.  These bushels will be completely priced at this time. 

 
 
 
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